By Staff Reporter
KARACHI: State-run grains agency Trading Corporation of Pakistan (TCP) received the lowest offer at $560 a metric ton, cost and freight included, in its international tender to buy 200,000 metric tons of white refined sugar, traders said on Thursday.
The bid, from trading house Bare for small-grade sugar, comes as the agency evaluates offers to combat retail prices that have soared past Rs200 per kilogram, with no purchases yet finalised and negotiations likely to stretch over days.
The tender, issued last week and opened on Thursday, seeks fine, small, and medium-grade sugar for delivery by October 31 as part of a government plan approved on July 8 to import 500,000 tons to stabilise a market where prices have breached the 173-rupee retail cap and 165-rupee ex-mill limit. The price surge, driven by supply shortages, has fueled public frustration over food inflation in Pakistan, where domestic production fell short this season.
Bare’s $560-per-ton bid for small-grade sugar was paired with a $580 offer for medium-grade, totaling 187,000 tons. Other bids included 25,000 tons of small-grade sugar from Sucden at $579, Dreyfus at $581.50, and Cofco at $592 per ton c&f. ED&F Man offered 32,000 tons of small-grade at $579 and 27,400 tons at $569, while Dubai-based Al Khaleej Sugar proposed 60,000 tons of small-grade at $572.30 and 30,000 tons of medium-grade at $582.30 per ton c&f. Traders noted these figures reflect initial assessments, with price and volume estimates potentially shifting as TCP negotiates.
The tender builds on TCP’s recent procurement, including 105,000 tons bought in a round reported on August 14. A tender closed earlier this week secured 55,000 tons from offers up to 100,000 tons: 30,000 tons of medium-grade from Al Khaleej Sugar at $586 per ton and 25,000 tons of fine-grade from Louis Dreyfus Co. at about $580 per ton. Another bidder is revising its offer, with a possible additional award imminent. Shipments are set for September, with 50,000 tons of breakbulk arriving between September 1 and 15, the remainder from September 10 to 25, and container shipments from September 1 to 20, all due by October 20.
In a parallel effort, Pakistan secured Letters of Credit through Azerbaijan’s state-owned SOCAR for 85,000 metric tons of sugar to ease shortages and curb prices. The Federal Ministry of Food Security announced last week, “In order to meet the demand for sugar in the country and stabilise prices, Letters of Credit (LCs) have been established through SOCAR for the import of 85,000 metric tons of sugar. All these LCs have been formally opened and disbursed through the relevant banks and this consignment of sugar will be delivered to Pakistan in phases under the trade agreement signed with SOCAR.”
Pakistan’s sugar market is under strain after the 2024-25 crushing season produced 5.8 million metric tons, short of the 7 million-ton forecast due to erratic weather, against a domestic demand of 6.3 million tons. An export ban was imposed in January 2025 after 750,000 tons were shipped last year for $402 million. Early in the season, reserves stood at 800,000 tons with a 1.3 million-ton surplus, driving retail prices down from 138 rupees per kilogram to 119 rupees by October 2024. Tighter supplies later reversed those gains, pushing prices above 200 rupees.
Stocks as of April 30 totaled 6.3 million tons, including a 0.5 million-ton buffer, sufficient for annual consumption. Current reserves of 2 million tons cover three months, yet prices keep rising, with the government pointing to market manipulation. TCP’s recent tenders have hit snags: a July bid for 50,000 tons drew no offers due to tight deadlines, and a July 31 tender for 100,000 tons failed over high prices. An August 2 tender saw TCP reject bids from ED&F Man ($539 per ton) and Bare Syndicate ($555 per ton) for documentation issues, later clarifying that only Bare’s bid lacked mandatory bid security. ED&F Man’s 50,000-ton bid at $539 was accepted, alongside higher bids from Louis Dreyfus ($580.75 per ton) and Al Khaleej Sugar ($586 per ton).
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